Market Analysis on January 30th

Today is January 30th. The Dow Jones index hit a historical high for three consecutive days, while the S&P 500 index rebounded to a record high, and the Nasdaq index also rebounded to a two-year high. On the eve of the financial report, Microsoft rose by over 1%, with Google reaching a record high. The chip index halted its decline after two days, with AMD closing higher in a thrilling manner, without falling further from its historical high. Nvidia rose by over 2%, reaching a new high. Tesla rose by over 4%. The performance of the US stock market that day was: The Dow Jones rose by 0.59%, the S&P 500 index rose by 0.76%, and the Nasdaq rose by 1.12%.

Basis trading may become the "liquidity risk" trigger for the US financial system this year. The scale of basis trading in US bonds may have exceeded 1 trillion US dollars. The net short position of leverage funds on US Treasury bond futures has also significantly increased. If this round of basis arbitrage trading reverses, liquidity issues will spread faster in the financial system.

The US Treasury Department has lowered its expectations for the size of the borrowing in the first quarter, unexpectedly reducing the size of the borrowing. In January, the issuance of corporate bonds in the United States reached 176 billion US dollars, a record high for the same period. After the US Treasury Department announced the downward revision of the borrowing expectations for the first quarter, the US stock market expanded its gains, the decline in US Treasury yields widened, and the 10-year yield fell below 4.10%, hitting a new low in more than a week, while the US dollar index, which hit a six-week high, briefly turned lower. Crude oil rose more than 1% in intraday trading and then fell more than 1%, ending a three-day rally and dropping from a two-month high. Gold rebounded to a nearly one-week high. Bitcoin rose above 0.043 million US dollars in intraday trading, hitting a two-week high.

In the Chinese market, during the US stock market session, Chinese concept stocks fell by 1%, falling for three consecutive days, with Pinduoduo down more than 8% and New Oriental down more than 4%; offshore renminbi fell more than 100 basis points and approached 7.20, but later reversed to rise. The ChiNext Index fell more than 3%, with stocks beginning with the middle letter (Chinese A-shares) rising against the trend, and the photovoltaic sector experiencing setbacks. The three major Hong Kong stock indexes rose, but the CStone series of pharmaceutical stocks fell.

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